U.S.-Mexico Remittance Tax Standoff Ignites With Trump’s Big, Beautiful Bill
Trump’s big, beautiful bill, which proposes a 3.5% tax on remittances sent by immigrants to their home countries, has forced Mexico’s president, Claudia Sheinbaum, to take a stance against it. Sheinbaum vowed to mobilize against this and announced measures to render it ineffective.
Trump’s big, beautiful bill, one of his administration’s signature acts, has the Mexican government on alert due to the repercussions that its citizens in the U.S. might face after its approval. If passed, the bill would establish a 3.5% tax, reduced from 5% in a recent revision, on the remittances sent abroad by immigrants, affecting the outflows sent to families in other countries.
In May, Sheinbaum already alerted that her administration was against this measure, labeling it as unfair given that Mexican citizens work hard and pay their taxes. Sheinbaum stated that her government made a call for these citizens to send letters and emails to U.S. senators, clarifying that Mexicans stand against this initiative.
She stated:
“If necessary, we will mobilize. We don’t want this tax to affect the remittances of our countrymen, who tend to the needy.”
More recently, Sheinbaum stressed that her administration was working on establishing an alternative, called Finabien, to reduce the future fees collected on these money flows.
The firm stance of the Mexican government and the recent riots in the U.S. against immigrant deportations have escalated this issue. Missouri Senator Eric Schmitt recently vowed to increase the tax, reaffirming that the U.S. was neither an economic zone nor an airport with a shopping mall attached.
“I’m introducing legislation to quadruple the proposed remittance tax — from 3.5% to 15%. America is not the world’s piggy bank. And we don’t take kindly to threats,” Schmitt stressed in a social media post issued on Sunday night.
The effect of this new increased tax on Mexican remittances would be pronounced, reducing outflows and increasing the income expected for this measure even more than estimated.
According to analysts, crypto might be a lifeline for Mexicans and other immigrants, given that these outflows would be more difficult for U.S. authorities to track and tax, as long as they are sent from unhosted wallets.
Read more: Trump’s ‘Big, Beautiful Bill’ Could Push Millions to Crypto